WSJ What’s News: What the Entertainment Industry Has in Store for 2025

Release Date: December 31, 2024
Host: The Wall Street Journal

Introduction

In the latest episode of WSJ's "What’s News," host Alex Osoloh delves into the multifaceted state of the entertainment industry as it approaches 2025. The discussion navigates through the challenges and triumphs of the past year, highlighting significant trends and forecasting what audiences and industry players can expect in the coming year.

Retail and the Housing Market

The episode begins with an analysis of the U.S. retail landscape, particularly focusing on the correlation between the housing market and retail performance.

• Store Closures Outpace Openings:
  Alex Osoloh reports that in 2024, more U.S. retail stores closed than opened, reversing a two-year trend. Kate King, WSJ’s retail real estate expert, emphasizes, “Retailers that sell home furnishings and home improvement materials to Americans are certainly hurt by the housing slowdown” (00:36).

• Impact of Sluggish Housing on Retailers:
  Sarah Kraus explains, “If you aren't selling your home, it's probably likely that you aren't buying new windows or a new hardwood floor” (01:58). This slowdown affects retailers dependent on home sales, yet there are silver linings. Elevated home prices and decreasing inflation offer some respite, although a robust housing market remains crucial for retail growth (02:25).

• Retail Real Estate Remains Strong:
  Despite the increase in store closures, the retail real estate market remains resilient. Sarah Kraus highlights, “There are many retailers that are still expanding... retail vacancy is still quite low” (03:20). Rising rents and limited new construction have maintained high demand for available retail spaces.

Power Outage in Puerto Rico and Chinese Chip Developments

The conversation briefly touches on significant events outside the entertainment sphere:

• Puerto Rico Power Outage:
  Over a million people in Puerto Rico are experiencing a power outage. Alex Osoloh notes, “Preliminary findings suggest a fault with an underground power line” (04:32). The restoration is expected within 24 to 48 hours.

• China’s Push for Domestic Chip Production:
  China is expanding its domestic chip production, with about 15% of chips used by Chinese automakers now being manufactured domestically—a number set to grow as the government supports local chip makers. This move coincides with the U.S. investigation into China’s chip production for sectors like automotive and defense (04:55).

2024 Entertainment Industry Highlights

As the year wraps up, Kate King and Sarah Kraus reflect on the defining moments of 2024 in entertainment:

• Blockbuster Films and Streaming Hits:
  Theaters saw major releases such as “Inside Out 2,” “Deadpool,” and “Wolverine,” alongside successful streaming shows like “Bridgerton” and “Bluey” (06:37). The industry continues to recover from the disruptions caused by prolonged Hollywood strikes, returning to a more normalized release schedule.

Taylor Swift’s Groundbreaking Eras Tour

A significant highlight of the year was Taylor Swift’s Eras Tour, which concluded with remarkable success:

• Tour Scale and Economic Impact:
  Sarah Kraus describes the tour as “the length and the scale... over 140 shows across 21 countries” (07:30). The tour not only generated an estimated $2 billion in revenue but also spurred economic activity in host cities, boosting spending in hotels and local businesses.

• Influence on the Music Industry:
  The tour has set a new benchmark, inspiring other artists to embark on extensive touring schedules. However, Sarah Kraus notes that replicating Swift’s success is challenging due to her unique blend of talent, extensive catalog, and fanbase loyalty (08:27).

Streaming Trends and the Rise of Appointment Television

The discussion shifts to evolving consumption patterns in streaming:

• Live Programming and Advertising:
  Streamers are increasingly investing in live programming to attract advertisers. Sarah Kraus states, “When you can bring a lot of eyeballs together around one cultural or sporting event, that's good news for your ad business” (09:48). This strategy includes introducing ad-supported service tiers to retain customers by offering lower-cost options.

• Live Sports Integration:
  Live sports remain a vital component of streaming platforms. Amazon’s acquisition of NBA rights is poised to disrupt traditional broadcasting, ensuring that sports remain a key draw for streaming services (09:48).

Future Trends for Entertainment in 2025

Looking ahead, several trends are anticipated to shape the entertainment landscape:

• Rise of Podcasts:
  Sarah Kraus predicts continued growth in podcasting, especially following its influential role in the 2024 presidential election. The dynamics within the podcast space will evolve, with prominent figures like Joe Rogan and emerging voices shaping the medium (11:10).

• YouTube’s Growing Dominance:
  YouTube is rapidly ascending as a primary entertainment platform, rivaling traditional TV and streaming services. Sarah Kraus observes, “YouTube is number two after Disney” in terms of TV time share among streamers, highlighting its increasing popularity across diverse age groups (11:10). The platform's blend of user-generated and professional content continues to attract substantial viewership.

• Convergence of Content Platforms:
  The lines between different content forms are blurring, with platforms like YouTube gaining acceptance within mainstream entertainment circles. Sarah Kraus notes, “There’s this sort of convergence theme... viewers are spending more time with it” (11:10).

Conclusion

As 2024 concludes, the entertainment industry stands at a crossroads of innovation and recovery. The enduring impact of live performances, the strategic evolution of streaming services, and the burgeoning influence of digital platforms like YouTube and podcasts are set to drive the industry forward into 2025. WSJ's "What’s News" provides a comprehensive overview of these developments, offering insights essential for stakeholders and audiences alike.

Notable Quotes with Timestamps

• Kate King: “Retailers that sell home furnishings and home improvement materials to Americans are certainly hurt by the housing slowdown.” (01:58)

• Sarah Kraus: “If you aren't selling your home, it's probably likely that you aren't buying new windows or a new hardwood floor.” (01:58)

• Kate King: “Does that change the outlook at all for [retailers]?” (02:29)

• Sarah Kraus: “Retail vacancy is still quite low. Rents are rising and a lot of retailers are happy that some stores are going out of because that means there is space for them to open new stores.” (03:24)

• Sarah Kraus: “ERAS was part of that ... this boom in everyone hitting the road to tour.” (07:30)

• Sarah Kraus: “YouTube is number two after Disney... it's very much worth watching that speaks directly to how people's preferences are changing.” (11:10)

Produced by Pierre Biennma and supervised by Michael Kosmides.

Timestamps Reference

• 00:36: Introduction to retail store closures.
• 01:58: Impact of housing market on home improvement retailers.
• 02:29: Outlook for retailers amidst sluggish housing market.
• 03:24: Retail real estate market strength.
• 04:32: Puerto Rico power outage details.
• 04:55: China's domestic chip production efforts.
• 06:37: 2024 entertainment industry highlights.
• 07:30: Taylor Swift’s Eras Tour impact.
• 08:27: Emulation of Taylor Swift’s touring model by other artists.
• 09:48: Streaming services’ strategies with live programming and sports.
• 11:10: Future trends in podcasts and YouTube’s dominance.